In Holmdel Builder's Association v. Holmdel
Township, 121 N.J. 550 (1990), the New Jersey Supreme Court determined
that mandatory development fees are authorized by the Fair Housing
Act of 1985, N.J.S.A. 52:27d-301 et seq., and the State Constitution,
subject to the Council on Affordable Housing's (COAH's) adoption of
rules. This article establishes standards for the collection, maintenance,
and expenditure of development fees pursuant to COAH's rules and the
Superior Court's prior approval. Fees collected pursuant to this article
shall be used for the sole purpose of providing low- and moderate-income
housing. This article shall be interpreted within the framework of
COAH's rules on development fees.

The City of Somers Point received a conditional second
cycle Judgment of Repose that permits the City to expend collected
development fees on a second cycle regional contribution agreement
(RCA) in the event of a funding shortfall.

The City of Somers Point shall not spend development
fees for other purposes until COAH or the Superior Court has approved
a plan for spending such fees and has either received third cycle
substantive certification from COAH or a third cycle judgment of repose
from the Superior Court.

The value of a property determined by the Municipal Tax Assessor
through a process designed to ensure that all property in the municipality
is assessed at the same assessment ratio or ratios required by law.
Estimates at the time of issuance of a building permit may be obtained
utilizing estimates for construction cost. Final equalized assessed
value will be determined at project completion by the Municipal Tax
Assessor.

When an increase in residential density pursuant to
N.J.S.A. 40:55D-70d(5) (known as a "d" variance) has been permitted,
developers shall be required to pay a development fee of 6% of the
equalized assessed value for each additional unit that may be realized.
However, if the zoning on a site has changed during the two-year period
preceding the filing of such a variance application, the base density
for the purposes of calculating the bonus development fee shall be
the highest density permitted by right during the two-year period
preceding the filing of the variance application.

If an increase in floor area is approved pursuant
to N.J.S.A. 40:55D-70d(4), then the additional floor area realized
(above what is permitted by right under the existing zoning) shall
incur a bonus development fee of 6% of the equalized assessed value
for nonresidential development. However, if the zoning on a site has
changed during the two-year period preceding the filing of such a
variance application, the base floor area for the purposes of calculating
the bonus development fee shall be the highest floor area permitted
by right during the two-year period preceding the filing of the variance
application.

Developments that have received preliminary or final
approval prior to the adoption of a municipal development fee ordinance
shall be exempt from development fees unless the developer seeks a
substantial change in the approval.

The expansion of a residential structure to create
a separate housekeeping unit, the conversion of a residential structure
to nonresidential use, or the expansion of a nonresidential structure
or conversion to a more intense use shall be subject to development
fees. The development fee shall be calculated on the increase in the
equalized assessed value of the converted structure or the equalized
assessed value of the newly created residential unit.

The construction or expansion of a house of worship
shall be exempt from development fees. For purposes of this exemption,
a house of worship shall be deemed to exclude any structures that
would generate a growth share or other affordable housing obligation
by COAH.

Nonprofit hospital structures referenced in a judgment
approving the settlement of exclusionary zoning litigation shall be
exempt from development fees, to the extent stated in a court-approved
settlement agreement.

Residential developments that received building permits
prior to June 21, 2007, shall be exempt from development fees provided
that the development did not require subdivision approval, site plan
approval or a variance under N.J.S.A. 40-55D-70(d).

Owner-occupied residential structures that have been issued a demolition
permit, provided that the unit for which the demolition permit has
been issued was occupied by its current owner for at least one year
prior to the demolition, no change in use has occurred, and which
unit shall be subtracted from actual growth, a development fee pursuant
to N.J.A.C. 5:97-8.3(c) based on the increase in equalized assessed
value that results from reconstruction shall be imposed; unless

The owner-occupied structure which shall have been issued a demolition permit which satisfies the requirements of Subsection H(1) shall have been issued the demolition permit as a result of destruction to the premises resulting from fire, flood or natural disaster, then and in such event, no development fee shall be imposed.

Fifty percent of the development fee will be
collected at the time of issuance of the building permit. The remaining
portion will be collected at the issuance of the certificate of occupancy.
The developer shall be responsible for paying the difference between
the fee calculated at the issuance of the building permit and that
determined at issuance of the certificate of occupancy.

Imposed and collected development fees that
are challenged shall be placed in an interest-bearing escrow account
by the City of Somers Point. If all or a portion of the contested
fees are returned to the developer, the accrued interest on the returned
amount shall also be returned.

There is hereby created a separate, interest-bearing
housing trust fund for the purpose of depositing development fees
collected from residential and nonresidential developers and proceeds
from the sale of units with extinguished controls. All development
fees paid by developers pursuant to this article shall be deposited
into this fund.

Within seven days from the opening of the trust fund
account, the City of Somers Point shall provide COAH with written
authorization, in the form of a three-party escrow agreement between
the municipality, the bank, and COAH to permit COAH to direct the
disbursement of the funds as provided for in N.J.A.C. 5:94-6.16(b).

With the exception of the Court-approved expenditure
on a second-cycle RCA, no other funds shall be expended from the Affordable
Housing Trust Fund unless the expenditure conforms to a third cycle
spending plan approved by COAH or a Court of competent jurisdiction.
All interest accrued in the housing trust fund shall only be used
on eligible affordable housing activities approved by COAH or the
Court.

Funds deposited in the housing trust fund may be used
for any activity approved by COAH or the Court to address the municipal
fair share. Such activities include, but are not limited to: rehabilitation,
new construction, RCAs subject to the provisions of N.J.A.C. 5:94-4.4(d),
ECHO housing, purchase of land for affordable housing, improvement
of land to be used for affordable housing, purchase of housing, extensions
or improvements of roads and infrastructure to affordable housing
sites, financial assistance designed to increase affordability, or
administration necessary for implementation of the Housing Element
and Fair Share Plan. The expenditure of all funds shall conform to
a spending plan approved by COAH or the Court.

After subtracting development fees collected to finance
an RCA, a rehabilitation program or a new construction project that
are necessary to address the City of Somers Point affordable housing
obligation, at least 30% of the balance remaining shall be used to
provide affordability assistance to low- and moderate-income households
in affordable units included in the municipal Fair Share Plan. One-third
of the affordability assistance portion of development fees collected
shall be used to provide affordability assistance to those households
earning 30% or less of median income by region.

Affordability assistance to households earning 30%
or less of median income may include buying down the cost of low-
or moderate-income units in the third round municipal Fair Share Plan
to make them affordable to households earning 30% or less of median
income. The use of development fees in this manner shall entitle the
City of Somers Point to bonus credits pursuant to N.J.A.C. 5:94-4.22.

The City of Somers Point may contract with a private
or public entity to administer any part of its Housing Element and
Fair Share Plan, including the requirement for affordability assistance,
in accordance with N.J.A.C. 5:94-7.

No more than 20% of the revenues collected from development
fees each year, exclusive of the fees used to fund an RCA, shall be
expended on administration, including, but not limited to, salaries
and benefits for municipal employees or consultant fees necessary
to develop or implement a new construction program, a Housing Element
and Fair Share Plan, and/or an affirmative marketing program. In the
case of a rehabilitation program, no more than 20% of the revenues
collected from development fees shall be expended for such administrative
expenses. Administrative funds may be used for income qualification
of households, monitoring the turnover of sale and rental units, and
compliance with COAH's monitoring requirements. Development fee administrative
costs are calculated and may be expended at the end of each year or
upon receipt of the fees.

The City of Somers Point shall complete and
return to COAH all monitoring forms included in the annual monitoring
report related to the collection of development fees from residential
and nonresidential developers, payments in lieu of constructing affordable
units on site, and funds from the sale of units with extinguished
controls, and the expenditure of revenues and implementation of the
plan approved by the court. All monitoring reports shall be completed
on forms designed by COAH.

The Superior Court has approved the City of
Somers Point Affordable Housing Development Fee Ordinance. The ability
for the City of Somers Point to impose, collect and expend development
fees shall expire with its judgment of compliance unless the City
of Somers Point has filed an adopted Housing Element and Fair Share
Plan with COAH or the Court and has petitioned for substantive certification
or a judgment of compliance within 120 days after COAH adopts third
round regulations. If the City of Somers Point fails to renew its
ability to impose and collect development fees, it may resume the
imposition and collection of development fees only by complying with
the requirements of N.J.A.C. 5:94-6. The City of Somers Point shall
not impose a development fee on a development that receives preliminary
or final approval after the expiration of its substantive certification
or judgment of compliance, nor will the City of Somers Point retroactively
impose a development fee on such a development. The City of Somers
Point will not expend development fees after the expiration of its
substantive certification or judgment of compliance.

This article of the City Code sets forth regulations
regarding the low- and moderate-income housing units in the City consistent
with the provisions known as the "Substantive Rules of the New Jersey
Council on Affordable Housing for the period beginning December 20,
2004," N.J.A.C. 5:94 et seq., the Uniform Housing Affordability Controls,
N.J.A.C. 5:80-26.1 et seq., and the City's constitutional obligation
to provide a fair share of affordable housing for low and moderate
income households. These regulations are also intended to provide
assurances that low- and moderate-income units (the "affordable units")
are created with controls on affordability over time and that low-
and moderate-income people occupy these units. These regulations shall
apply except where inconsistent with applicable law.

Affordable housing developments that are limited to
age-restricted households shall at a minimum have a total number of
bedrooms equal to the number of age-restricted affordable units within
the affordable housing development. The standard may be met by creating
all one-bedroom units or by creating a two-bedroom unit for each efficiency
unit.

The maximum rent of affordable units within each affordable
housing development shall be affordable to households earning no more
than 60% of median income. The average rent for low- and moderate-income
units shall be affordable to households earning no more than 52% of
median income. Restricted rental units shall establish at least one
rent for each bedroom type for all low- and moderate-income units
provided at least 10% of all low- and moderate-income units are affordable
to households earning no more that 35% of median income.

Gross rents including an allowance for utilities shall be established for the various size affordable units at a rate not to exceed 30% of the gross monthly income of the appropriate household size as set forth in § 69-16A above. The allowance for utilities shall be consistent with the utility allowance approved by the New Jersey Department of Community Affairs (DCA) for use in its Section 8 Program.

No affordable rental units included in the COAH requirement
shall be subject to a rent control ordinance which may be adopted
or in place in the City of Somers Point during the time period in
which affordable housing COAH controls are effective.

The maximum sales price of restricted ownership units
within each affordable development shall be affordable to households
earning no more than 70% of median income. Each affordable development
must achieve an affordability average of 55% for restricted ownership
units. Moderate-income ownership units must be available for at least
three different prices for each bedroom type and low-income ownership
units must be available for at least two different prices for each
bedroom type.

The initial purchase price for all restricted ownership
units shall be calculated so that the monthly carrying costs of the
unit, including principal and interest (based on a mortgage loan equal
to 95% of the purchase price and the Federal Reserve H.15 rate of
interest), taxes, homeowner and private mortgage insurance and condominium
or homeowner association fees do not exceed 28% of the eligible monthly
income of an appropriate household size as determined under N.J.A.C.
5:80-26.4; provided, however, that the price shall be subject to the
affordability average requirement of N.J.A.C. 5:80-26.3.

If an affordable housing unit is part of a condominium
association or homeowners' association, the Master Deed shall reflect
that the assessed affordable homeowners' fee be established at 100%
of the market rate fee. This percentage assessment shall be recorded
in the Master Deed.

Unless otherwise approved by COAH or the Superior
Court, final site plan or subdivision approval shall be contingent
upon the affordable housing development meeting the following phasing
schedule for low- and moderate-income units whether developed in one
stage or in two or more stages:

The City of Somers Point is ultimately responsible
for monitoring the affordable housing program, including affordability
controls and the affirmative marketing plan in accordance with the
regulations of the Council on Affordable Housing pursuant to N.J.A.C.
5:94 et seq. and the New Jersey Uniform Housing Affordability Controls
pursuant to N.J.A.C. 5:80-26 et seq.

The City of Somers Point has delegated to the municipal
housing liaison the responsibility for monitoring the affordable housing
program including administrating and enforcing the affordability controls
and the Affirmative marketing plan of the City of Somers Point in
accordance with the provisions of this article, the regulations of
the Council on Affordable Housing pursuant to N.J.A.C. 5:94 et seq.,
and the New Jersey Uniform Housing Affordability Controls pursuant
to N.J.A.C. 5:80-26 et seq. The City of Somers Point shall by resolution
appoint the City administrator as the municipal housing liaison to
monitor the affordable housing program.

Subject to COAH approval, the City of Somers Point
shall contract with one or more administrative agents to administer
all of the affordability controls and/or the Affirmative marketing
plan in accordance with this article, the regulations of the Council
on Affordable Housing pursuant to N.J.A.C. 5:94 et seq. and the New
Jersey Uniform Housing Affordability Controls pursuant to N.J.A.C.
5:80-26 et seq. The municipal housing liaison shall monitor the contracting
administrative agent(s).

The City of Somers Point intends to contract with
an experienced affordable housing administrator to be the administrator
of the sale and rental of all new affordable housing. The experienced
affordable housing administrative agent will oversee and administer
the income qualification of low- and moderate-income households; placing
income eligible households in low- and moderate-income units upon
initial occupancy; placing income eligible households in low- and
moderate-income units as they become available during the period of
affordability controls and enforcing the terms of the required deed
restrictions and mortgage loans. The experienced affordable housing
administrative agent will administer and implement:

An administrative plan and program, and related monitoring
and reporting requirements as outlined in N.J.A.C. 5:80-26.15 et seq.
and the Land Use Ordinances of the City of Somers Point after review
by the City Planning Board and City Council.

Procedures to assure that low- and moderate-income
units are initially sold or rented to eligible households and are
thereafter similarly resold and rerented during the period while there
are affordability controls as per N.J.A.C. 5:80-26 et seq.

The requirement that all newly constructed low- and
moderate-income sales or rental units contain deed restrictions with
appropriate mortgage liens as set forth in appendices in N.J.A.C.
5:80-26 et seq.

The several sales/purchase options authorized under
N.J.A.C. 5.80-26 et seq. except that the City retains the right to
determine by resolution whether or not to prohibit, as authorized
under N.J.A.C.5:80-26 et seq., the exercise of the repayment option.

The regulations determining whether installed capital
improvements will authorize an increase in the maximum sales price;
and which items of property may be included in the sales price as
per N.J.A.C. 5:80-26.9.

The developers/owners of any inclusionary site shall
be responsible for the experienced affordable housing administrator's
administrative fee, affirmative marketing and advertising and such
shall be a condition of Planning Board or Zoning Board of Adjustment
approval. Subsequent to the initial sale or the initial rental of
an affordable unit, the seller of an affordable sale unit or the owner
of an affordable rental unit shall be responsible for the experienced
affordable housing administrator's administrative fee, affirmative
marketing and advertising and such shall be a condition of any affordable
housing deed restriction governing the unit.

The City of Somers Point reserves the right to replace
the administrative agent(s) with another experienced affordable housing
agency authorized by COAH to carry out the administrative processes
outlined above.

Housing units created through conversion of a nonresidential structure shall be considered a new housing unit and shall be subject to affordability controls for new housing units as designated in Subsections A and B.

Households who live or work in COAH's Housing Region
6 consisting of Atlantic, Cape May, Cumberland, and Salem Counties
shall be given preference for sales and rental units constructed within
this housing region. Applicants living outside this housing region
will have an equal opportunity for units after regional applicants
have been initially serviced.

In accordance with the regulations of COAH pursuant
to N.J.A.C. 5:94 et seq., and the New Jersey Uniform Housing Affordability
Controls pursuant to N.J.A.C. 5:80-26 et seq., the regulations below
shall serve as the City of Somers Point's Affirmative marketing plan.

The City of Somers Point has a second round and a
third round obligation. This section shall apply to all developments
that contain proposed low- and moderate-income units and any future
developments that may occur.

The affirmative marketing plan is a regional marketing
strategy designed to attract buyers and/or renters of all majority
and minority groups, regardless of race, creed, color, national origin,
ancestry, marital or familial status, gender, affectional or sexual
orientation, disability, age or number of children to housing units
which are being marketed by a developer or sponsor of affordable housing.
The affirmative marketing plan is also intended to target those potentially
eligible persons who are least likely to apply for affordable units
in that region. It is a continuing program that directs all marketing
activities toward the COAH Housing Region in which the municipality
is located and covers the period of deed restriction. The City of
Somers Point is in the housing region consisting of Atlantic, Cape
May, Cumberland, and Salem Counties. The affirmative marketing program
is a continuing program and shall meet the following requirements:

The primary marketing shall take the form of at least
one press release sent to the above publications and a paid display
advertisement in the above newspapers. Additional advertising and
publicity shall be on an as-needed basis. The advertisement shall
include a description of the:

The following is a listing of community contact person(s)
and/or organizations(s) in Atlantic, Cape May, Cumberland, and Salem
Counties that will aid in the affirmative marketing program with particular
emphasis on contracts that will reach out to groups that are least
likely to apply for housing within the region:

Additionally, quarterly informational circulars
and applications shall be sent to the chief administrative employees
of each of the following agencies in the counties of Atlantic, Cape
May, Cumberland, and Salem:

The experienced affordable housing administrative
agent has the responsibility to income qualify low- and moderate-income
households; to place income eligible households in low- and moderate-income
units upon initial occupancy; to provide for the initial occupancy
of low- and moderate-income units which income qualified households;
to continue to qualify households for reoccupancy of units as they
become vacant during the period of affordability controls; to assist
with outreach to low- and moderate-income households; and to enforce
the terms of the deed restriction and mortgage loan as per N.J.A.C
5:80-26. The municipal housing liaison will act as liaison to any
experienced affordable housing administrative agency that may be contracted
by the City in the future. The experienced affordable housing administrative
agent shall provide counseling services to low- and moderate-income
applicants on subject such as budgeting, credit issues, mortgage qualifications,
rental lease requirements and landlord/tenant law.

The marketing program shall commence at least
120 days before the issuance of either temporary or permanent certificates
of occupancy. The marketing program shall continue until all low-income
housing units are initially occupied and for as long as affordable
units are deed restricted and occupancy or reoccupancy of units continues
to be necessary.